In what seems to be both a challenge and an opportunity for the electric vehicle battery swapping players, the new, under-consideration 'Battery Swap Policy' might not give weightage to the standardisation of batteries.
Notably, standardising batteries was one of the main pillars of the first draft of the battery swap policy, and the same was 'shelved' during the last quarter of FY23. An official close to the development told Mobility Outlook that the Government of India, along with industry players and other stakeholders, are finalising the new clauses of the policy.
“The clause for battery standardisataion might not appear in the new policy at all. A lot of industry players see no merit in the same,” the official said.
Sharing Tech Biggest Concern
The biggest concern that the industry is showing, if battery standardisation is made mandatory, is the sharing of technology prowess they have developed over the years and via decades of R&D. For instance, batteries made by one of the leading OEMs being deployed in vehicles made by another OEM, will make the battery tech, as well as the vehicle tech, susceptible to being copied in many cases.
Also Read: FAME-II Subsidy Slash Has 2-Wheeler Players Flummoxed
“The security layers are going to be there, but the industry is not certain if anyone will try to break into the same,” the official explained.
On being pointed towards several OEMs already using batteries from the same battery maker, the official said, “How many legacy companies do you see in the market for battery swapping in India? Once the new policy is published, this number is going to increase, and almost every legacy OEM is gearing to enter this arena.”
Several ministers, as well as Government officials, had immediately “nodded yes to delete battery standard clause” when the industry had discussed the implications of the same. They argued that if the idea was to make EV buying easy and economical, “we should let end consumers decide which battery they want to go with.”
In numbers, the cost of batteries in an electric vehicle constitutes 40% to 70% of the total bill of materials. This, including uncertainty around battery life, has been the hindrance in the adoption of electric vehicles, according to several reports “that were discussed.”
Policy Around The Corner
With the Department of Heavy Industries (DHI) decreasing the FAME subsidies on electric vehicles, the official said that the new Battery Swapping policy will once again make electric vehicles enticing for the end consumers.
The Society of Manufacturers of Electric Vehicles (SMEV) has sent several petitions to NGT and the Government of India to levy a green tax on the sale of internal combustion engine-powered vehicles to create a level playing field for the EV players. In its latest petition, it requested the MHI to revisit its decision to slash subsidies on EVs.
“The only thing to see will be how many OEMs are ready for battery swapping,” the official said. Declining to share the dates the policy will be finally launched and made legal, the individual also pointed towards more “possibilities” in the same, like “until someone or some institution can come forward and prove the merits of battery standardisation,” it is not going to be a part of the policy.
As per a report by Mordor Intelligence, the Indian battery swapping for electric two-wheelers market is expected to reach $27.14 billion by 2028, registering a CAGR of 18% over the next five years.